Asset Management Challenges in the Modern World

As internet technology continues to improve, investors are currently experiencing a new fintech era and landscape for the consumption of financial products and services.

FREMONT, CA: The COVID-19 pandemic has disrupted consumer behaviour and daily lives, accelerating innovation in investing channels and strategies. Investors are currently experiencing a new era of financial products and services, which is coupled with the ongoing advancement of internet technologies.

Promotion of Products

Asset management products' key problems, particularly in a private placement, have continually been the certification of eligible investors and proper product advertising. Operators must be careful not to overstep the bounds of appropriate promotion while taking the investors' operational comfort into account. To increase the likelihood that investors will be diverted, some agencies have switched from product details to briefings, while others have used self-certification or certification supported with other information to identify qualified investors.

Reliance on self-certification with a form over content emphasis could still result in compliance concerns with financial institutions' reckless know your customer (KYC) regulations. On the other hand, certifications supported by additional data like social security numbers and existing investment information may result in further privacy compliance problems. Financial product issuers and sellers who breach their suitability obligations and cause financial product consumers to suffer losses will be held jointly and severally liable for damages.

Therefore, prior agreements on operational issues and liability are especially crucial for product managers and sales agencies. A growing number of financial institutions are focusing on the legal compliance of the language and design of their electronic interfaces and perceive a financial compliance evaluation as a prerequisite to the release of information.

Signing Virtual Contracts

Customers no longer need to be physically present for traditional transactions to electronic signatures and remote audio/video recording, but these innovations have also created new difficulties.

Verification of certifications, the reliability of contract signatures, and particular audio/video recording techniques may negatively impact financial organisations and make it more challenging to protect the rights of financial consumers. The only way to guarantee that parties to legal documents can effectively control the risk of invalidation is through the use of an electronic signature that is trustworthy and complies with the Electronic Signature Law.

Common procedures include having one party submit the paper document while the other electronically sign it for confirmation; having both parties sign without the use of a certificate authority; or considering the signature to be genuine after it has been displayed. They may not inherently increase the danger of invalidation, but they will, in some cases, make the processing more expensive and unpredictable when disagreements emerge.

Both one-way audio/video recording of man-machine communication and two-way audio/video recording of two-party dialogue are crucial methods for verifying investors' statements and their sincere intents, as well as for properly informing investors about the dangers associated with the products. However, the procedure has become little more than a formality as a result of over-thinking investor experience and cutting the audio/video recording time. Audio and video recording are also rendered insignificant by technical limitations that make multi-party online signing for complex financial product scenarios like family trusts unfeasible.